(UPDATE: Corrects number of expected job losses.)
Economists Anil Puri and Mira Farka of Cal State Fullerton have revised their 2008 economic outlook for Orange County — they are now predicting 15,000 job losses, a drop of about 1 percent.
In their annual mid-year forecast update, out today, Puri and Farka have reversed their original prediction from last October that O.C. would see job growth of about 1.1 percent this year.
In the 12 months through March, the number of O.C. jobs has fallen by 21,700, or 1.4 percent, according to California’s Employment Development Department.
Puri and Farka also take the measure of the O.C. housing market in their forecast update:
In Orange County, though further downward adjustment in housing prices and related industries is expected for the remainder of the year and possibly into 2009, we believe that more than half of the anticipated adjustment has taken place. Although the pace of job losses so far is below that of the first three-month losses of the 1991-1992 and 2001 recessions, further weakness in economic activity and labor market are anticipated through the rest of this year.
RealtyTrac reported a 112.0% year-over-year spike in the number of foreclosures in the United States. Foreclosures have been on the rise for the last seven quarters. In a related trend, the Standard & Poor’s Case Schiller 20-City index also posted a 12.7% decline in home prices during the month of February. Both composites, the 10-City and 20-City indices, had their single largest monthly decline in February.
There is no sign of a bottom in the numbers. Prices of single family homes continue to drop across the nation. All 20 metro areas were in the red for the February-over-January reading.
Leading the decline, San Francisco home prices fell by 5.0% during February. Falling home prices increase the rate of foreclosure because when a mortgage exceeds the market value of a home, owners cannot refinance. They often choose foreclosure because of difficulty making payments or to simply get out of a tanking investment. This makes it almost impossible for homes in the surrounding area to command the prices they otherwise could.
According to RealtyTrac, there were 649,917 foreclosures in the United States during the first quarter of 2008, up 23.0% from the previous quarter, and up 112.0% from the first quarter of 2007. Foreclosures increased in 46 of the 50 states on a year-over-year basis.
The chilling effect of foreclosure was most intense in hotspots of subprime development and home sales. Nevada was the state with the highest number of foreclosures, with one in every 54 of its households in foreclosure. California came in second with one in every 78 households and Arizona followed with one in every 95 households in foreclosure.
The Sunshine state, Florida, and Golden state, California, had 13 of the top 20 cities with the highest rates of foreclosure.
Now who would put any credence in an economist who does a 180 in 6 months. Nice work…..
these economists dont know what they are speaking out
can they compare what they have predicted for the last 10 years and what actually happened. that will either give them credibility or more shit
These “economists” have Masters degrees in Economics! So they can do a 180 if they want to. I believe everything they say because they have a degree and I dont.
you can purchase a masters degree from an online university for $99. How many degrees do you want?
I have basically given up on finding a job.
Maybe these predictable economists should try reading other’s point of view, and then base their thesis on a more solid footing instead of throwing out oftentimes baseless ideas.
“Bank of England Signals Worst is Over,” by Chris Giles and Gillian Trent, ft.com, c. 1 May 2008
“Bank of England Signals Worst of Credit Crisis May Be Over,” by William L. Watts, dowjoneswire, 1 May 2008